I am an avid reader of books and have read my fair share of start-up success stories. Whether it was about Jack Ma, Elon Musk, Peter Thiel or our on Desi entrepreneurs. They all have stories to tell and lessons to learn from. But it was by chance that I landed on this book.
You see my elder cousin who is a lawyer by profession is a fan of Israel. Apart from being a defence buff he is also trained in Krav Maga (self-defence training of Israeli Defense Forces) and has met quite a few people from the country. For long he has told me that I should go to Israel and that it is one of the most technologically advanced countries in the world. His constant encouragement led me to look into the startup scene in the country…and I was simply amazed.
I also got a chance to interact with a few startups and VCs and wanted to know how Israel achieved all this.
And landed on the book “Start-Up Nation” by Dan Senor and Saul Singer. The book goes into the reasons why and how Israel became a startup success story.
The idea of a nation: The birth of Israel was painful, to say the least. After the horrors of World War II, Jews from across Europe, Russia and the Middle East landed in a place, which was mostly a desert, with the lack of basic necessities and a looming war for survival. The very idea of Israel as a nation is synonymous with a startup.
At a time when the state was finding it difficult to put food on the table, it’s visionary future President, then 29-year-old Shimon Peres who was the Deputy Director-General of the Ministry of Defense wanted to create an indigenous Aircraft industry. Despite opposition from within the political establishment, the founding member of Israel PM David Ben-Gurion backed him up. Thus started the Israel Aerospace Industries, which laid the stones for the nations Military-Industrial Complex.
From, a desert to a powerhouse in Agriculture, Horticulture, and Water recycling technology, Israel as a nation embodies the concept of a startup. Its founding political understood this and planned accordingly.
Innovation for survival: Israel is a small nation of 8.5 million people. It is surrounded by nations with which it has fought multiple wars. There is an economic blockade which forced Israel to go beyond the Middle-East. As Israel also lacks in natural resources its only export could be innovation. And against all odds, of terrorism and wars, Israel developed its supremacy in the technology world.
There is one word that can describe this Israeli attitude and that is “chutzpah”. It is a combination of guts, brazenness that challenges any presumptions. “Chutzpah” can be seen everywhere in Israel including its military.
IDF: The Israeli Defense Forces are the single biggest contributors to the startup ecosystem in the country. All 18-year-old men and women are drafted into the military to serve at least 2-3 years. They are then kept in reserve units who are called from time to time to serve for short duration. This helps them in forming bonds that last a lifetime.
The IDF also has an informal structure where the responsibility of conducting operations is delegated to local commanders. The “chutzpah” allows even a sergeant can challenge a General. As quoted in the book,
“Israelis learn that assertiveness is the norm, reticence something that risks your being left behind”
IDF has a culture of not only learning from their failures but also their successes, which is essential in any startup environment.
Unit 8200 & Beyond: Within the IDF, there is an elite unit called 8200 (Israeli counterpart to US NSA) which comprises of the brightest minds in computer science, electronics, and telecommunication. Each team within 8200 operates independently and 18-year-olds are tasked to find, track and stop terrorists. When their counterparts across the globe are busy watching the latest episodes of Game of Thrones, they are given the responsibility of protecting lives of civilians and their IDF colleagues.
For VCs in Israel, it matters which unit one serves in the IDF and alumni of Unit 8200 is considered to be the best. They come out of their service and develop civilian applications of what they have learned, thus becoming the source of many successful tech-startups in Israel.
Immigrant Nation: Like India, Israel is an extremely diverse nation. There has been a constant influx of immigrant Jews from across the globe. These immigrants have different cultures, food habits, and mother tongue. Yet, Israel has not only successfully assimilated them, but also turned it into a population dividend. For e.g. Many Russian Jews who came to Israel had the background in engineering, medicine, and life sciences. How Israel converted these underutilised talents into economic dividend is a huge success story, which greatly contributed to the Startup-Nation phenomena.
Usually, b-schoolers who desire to be entrepreneurs tend to be fixated on success stories from the west. On the contrary, Israeli startups offer a different perspective where technological innovation has ruled supreme. Changes happening in the field of AI, IoT, Augmented and Virtual Reality to name a few, it is time, that would be entrepreneurs start looking at the Israeli startup ecosystem for inspiration and support. With the cooperation between the 2 nations reaching new heights, there will never be a better time to take the leap.
A previous version of this article was published on NextBigWhat.